Estimated cost of proposed Washington County tidal energy project jumps to $120 million

BANGOR, Maine — The projected cost of constructing a low dam in the Washington County community of Pembroke to harness tidal energy flowing into and out of Pennamaquan River is now estimated at $120 million, not $70 million as indicated by the developer in an overview of the project initially filed in 2010 with the Federal Energy Regulatory Commission.

The third of three public meetings on the proposal by Utah physicist Ramez Atiya and his Pennamaquan Tidal Power LLC was held Friday afternoon at the Maine Department of Environmental Protection’s regional office in Bangor. Two similar meetings were held Thursday in Pembroke, each attended by three FERC fact-finders flown in from Washington, D.C.

Atiya said the new higher-cost estimate is largely the result of bids for the turbines coming in significantly above original projections. Even at $120 million, Atiya said, the new cost estimate is “conservative.”

Ted Verrill, chief financial officer of project partner Halcyon Tidal Power LLC, told the 25 people attending Friday’s hearing that most of the project’s costs would be financed through debt.

“Typically, 70 percent would be debt-funded and 30 percent with equity, but that could go 60/40,” he said. “We would typically approach investor groups that have been involved in energy development projects. With the recession, banks aren’t making long-term investments, so we might look at insurance companies or private equity funds.”

In its 2010 filings with the Federal Energy Regulatory Commission, the company estimates the facility would generate 80,000 megawatt hours of electricity annually. That would represent about eight-tenths of one percent of Maine’s annual energy requirements. Atiya estimates that’s enough electricity to meet the needs of a minimum of 13,000 homes.

Nick Palso, a FERC environmental specialist who coordinated this week’s public meetings, said Friday the federal review process is a long one. “We’re very early in the process.”

Palso said FERC will be soliciting public comment through Nov. 13, although that deadline may be extended.